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Market Reacts to Bank of Canada Meeting; Oil Prices Continue to Push Higher
Published April 19, 2018
USD/CAD remains near the 1.2600 handle this morning as the market continues to take in yesterday’s monetary policy projections from the Bank of Canada. As expected, Bank of Canada Governor Stephen Poloz kept rates steady at 1.25 percent.
Stephen Poloz acknowledged that Canadian inflation numbers are currently near target levels. Despite this, the BoC reiterated that monetary policy accommodation will still be required for Canadian economic growth, projecting that higher rates are warranted “over time”.
A slower than expected first quarter in 2018 combined with consistent worries over the Canadian housing market and US trade relations forced the Bank of Canada to hold a cautious tone. For now, markets are pricing in a near 70 percent chance of an interest rate hike in the BoC’s July meeting.
Oil prices surged to a 3-year high yesterday and continue to climb this morning as traders prepare for a meeting between OPEC members and other oil producing nations on Friday. Oil analysts are expecting the group to discuss new inventory targets that would extend their output cuts past the end of 2018 deadline.
Data on US unemployment claims is set to be released today at 8:30 AM EST. The Philly Fed Manufacturing Index, a gauge of economic health of manufacturers in the Philadelphia Federal Reserve district, will also be released at 8:30 AM EST.